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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
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  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
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  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

5 Revealing Analyst Questions From GEO Group’s Q2 Earnings Call

GEO Cover Image

The GEO Group’s second quarter results were met with a significant negative market reaction, despite revenue and profit surpassing Wall Street expectations. Management pointed to the activation and ramp-up of newly contracted ICE (U.S. Immigration and Customs Enforcement) facilities as the main drivers of year-over-year revenue growth. However, CEO George Zoley noted that margin performance was constrained by start-up expenses associated with bringing these new facilities online, and higher operating costs offset some of the gains from increased utilization across GEO’s ICE network. CFO Mark Suchinski highlighted that operating income remained flat due to these start-up costs.

Is now the time to buy GEO? Find out in our full research report (it’s free).

GEO Group (GEO) Q2 CY2025 Highlights:

  • Revenue: $636.2 million vs analyst estimates of $623.4 million (4.8% year-on-year growth, 2% beat)
  • EPS (GAAP): $0.21 vs analyst estimates of $0.16 (27.9% beat)
  • Adjusted EBITDA: $118.6 million vs analyst estimates of $111 million (18.6% margin, 6.9% beat)
  • The company lifted its revenue guidance for the full year to $2.56 million at the midpoint from $2.53 million, a 1.2% increase
  • EPS (GAAP) guidance for the full year is $0.89 at the midpoint, missing analyst estimates by 4.1%
  • EBITDA guidance for the full year is $477.5 million at the midpoint, below analyst estimates of $486.3 million
  • Operating Margin: 11.3%, down from 13.2% in the same quarter last year
  • Market Capitalization: $2.89 billion

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From GEO Group’s Q2 Earnings Call

  • Joseph Anthony Gomes (Noble Capital): Asked about the revenue potential from activating idle and temporary beds. Executive Chairman George Zoley estimated up to $250 million in incremental revenue if 5,000 additional beds are brought online, with established pricing for existing beds.
  • Joseph Anthony Gomes (Noble Capital): Inquired about shifts from SmartLINK to ankle monitor devices in ISAP and GEO’s preparedness. Zoley responded that GEO has increased inventory of ankle monitors and noted higher technology costs would require additional funding.
  • Matthew Erdner (Jones Trading): Questioned GEO’s positioning for management contracts at government-owned facilities. Zoley stated the company prefers owning facilities but is evaluating partnerships, especially with a defense contractor for potential Department of Defense opportunities.
  • Gregory Thomas Gibas (Northland Securities): Sought clarity on Marshals Service contract timing and ICE’s pace of facility reactivation. Zoley explained that agency funding and the recent budget reconciliation will determine activation timing, with focus on consolidating beds for the Marshals Service.
  • Raj Sharma (Texas Capital): Asked why ISAP volumes are expected to remain stable. Zoley explained ICE’s priority is maximizing detention capacity before expanding monitoring, and funding constraints are a key factor in the current outlook.

Catalysts in Upcoming Quarters

In the next few quarters, our analyst team will watch (1) the timing and scale of ICE facility activations and whether occupancy ramps to targeted levels, (2) developments in the ISAP program and any shifts in ICE’s use of electronic monitoring, and (3) the company’s progress in securing new contracts with the U.S. Marshals Service and state agencies. Execution on capital deployment, including the pace of share repurchases and debt reduction, will also serve as important signals of management’s ability to balance growth and financial discipline.

GEO Group currently trades at $21.10, down from $25.83 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

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